Everybody likes to plan for the future and whatever stage you are in your life right now, it’s good to know the facts when it comes to retiring. As always, preparation is key and ensuring you are financially secure as well as have some defined goals, retirement will be easy as one, two, three.
If you are thinking of retiring soon or sat at your desk in your 20’s thinking what you would do with your time if you weren’t at work, here’s everything you need to know about retiring:
What is the retirement age?
If you are fortunate enough to have stumbled across a genius idea or have won the lottery in your 30’s then there is no age restriction for you. However, for the rest of us, your ability to starting claiming a pension will depend on your age. The current Basic State Pension age for men is 65, and 62 for women – although this is set to increase to 66 for both sexes by 2020, and will continue to rise in the future.
Looking for early retirement?
Personal or workplace pensions allow you to claim from the age of 55, so if you think yours is enough to fund your chosen lifestyle after you stop working – retiring before State Pension age could be for you. As we said, it’s good to plan it earlier so that you can have financial goals in place and know how much you require in order to live the life you desire.
What if I don’t want to retire?
If you have found your passion and reach the basic state pension age, it doesn’t mean you have to stop working. There is no longer a cut-off point as to when you can retire. Thanks to modern medicine and human advancement, we are living longer and healthier lives. Employers can’t force you to retire, or discriminate against you based on age when hiring. There is a clause that states an employer can provide a ‘compulsory retirement age’ – although they will need to provide a fair and honest reason for doing so.
How will working past retirement age affect my pension?
You can still claim your pension once you’ve reached retirement age, but decide to stay on at work. Delaying it until you finish work is an option and will mean you’ll receive larger payments when you do decide to claim for your pension. This depends on your personal circumstance. There are general costs to consider when thinking of how much you need to retire such as basic living costs, hobbies, travel, emergencies such as car repairs or long-term healthcare.
If the thought has never crossed your mind, it may be worth looking into. With workplace pensions schemes available to everyone now, you may want to start thinking of how much money you are contributing against how much you need.